Does a $3.9 billion supply-chain investment mean we'll finally get an Apple HDTV?

Does a $3.9 billion supply-chain investment mean we'll finally get an Apple HDTV?

Summary: Last week it was revealed that Apple has made a secret investment of nearly $4 billion to make sure that a steady stream of device displays would be available for its myriad products. It didn't take one financial analyst too long to reach a none-too-surprising conclusion: In addition to providing for future iPhones, iPads, and iMacs, the investment is a sign Apple is gearing up to eventually release its own HDTV.


Last week it was revealed that Apple has made a secret investment of nearly $4 billion to make sure that a steady stream of device displays would be available for its myriad products. It didn't take one financial analyst too long to reach a none-too-surprising conclusion: In addition to providing for future iPhones, iPads, and iMacs, the investment is a sign Apple is gearing up to eventually release its own HDTV.

Piper Jaffray analyst Gene Munster has made a name for himself among fanboys predicting that the computing giant would make the leap from Apple TV to an Apple TV, so the supply-chain investment is just another indication to him that the company is readying a set for release by the end of 2012. quotes Munster concluding that:

While Apple's commitment to the living room remains a 'hobby,' we continue to believe the company will enter the TV market with a full focus, as an all-in-one Apple television could move the needle when connected TVs proliferate.

It's not a far-fetched idea, mind you, though connected TVs have not been the runaway success that manufacturers have hoped for. An Apple TV would no doubt rope in the iPhone, iPod, and iPad as part of its eco-system, but apps to use those devices as remote controls are quickly becoming a dime a dozen. An Apple HDTV might be the one brand that could withstand the downward pricing pressures that other television manufacturers like Sony have had to endure, as we know people will buy Apple products no matter how much more they cost than the competition.

Can Apple finally succeed where many others have failed at integrating the online world with a TV set? (At least it's probably smart enough to include built-in 802.11n Wi-Fi instead of just an Ethernet port, unlike some HDTV manufacturers.) We'll seemingly have plenty of time to debate the issue while we wait -- and maybe someone else will really figure it out before then.

Topics: Enterprise Software, Apple, Banking, Hardware, Mobility, Software

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  • Doubtful but..

    if there's one company that has a good chance to pull it off and I wouldn't bet against, it's Apple. No one can deny they have a good track record the last decade.
    • I agree that Apple has a much better chance of delivering the first mass

      market success internet connected TV with integrated computer. Where I might disagree is that I do not think it is doubtful.
  • it's a low margin business.. don't see Apple joining that game nt.

    • Not if they can get AppleTV embedded in most models

      The profit from the back-end infrastructure, software and hardware can be huge.

      Imagine on-demand videos, live pay-per-view events, TV apps, etc. all delivered via an iTunes TV store.
      • RE: Does a $3.9 billion supply-chain investment mean we'll finally get an Apple HDTV?

        @wackoae How is that different then what it is now with AppleTV 2? Apps are coming and more of these "on-demand" features on top of the existing rentals and purchases also. I don't see Apple going into the TV business.
    • Hey, music players, cell phones, laptops, desktops, tablets are also low

      margin business. Well, for everybody but Apple that is!!!
  • Apple succeeds where everybody fails

    I can see Apple succeeding where Google failed miserably.

    Anybody who thinks that GoogleTV was a good product is in complete denial of reality.
    • Google has not necessarily failed yet, as there is nobody doing high volume

      in internet connected TVs with computer installed. But, Google has been a help to Apple in slowly getting people accustomed to the idea of something besides a dumb TV. Look for Google to keep at it and perfect Google TV, and, if Apple does come out with a complete TV, you can bet it will be a huge hit, and you can also bet that the rest of the manufacturers will jump on the Google bandwagon like with cell phones and tablets.
  • Low margins plus lots of established competition

    I don't see it. Maybe a few years ago before TV makers started building in wi-fi streaming and app capabilities into their newest TV's. At most getting your iTunes content onto a TV is a $99 purchase through the Apple TV and that isn't rocking the sales charts. Now what does make sense is for Apple to develop an "Apple TV App" that it could license out to BluRay and TV manufacturers.
    • Yes, but, the luxury of having an Apple branded TV will be irresistible

      for those that have the money. Apple will get into it because they will make a huge profit selling the whole shebang, as usual completely integrated, with an app market, and content controlled by . . . Apple.
      • I keep wondering why people say it will be "low margin"

        Won't they just raise it to where it's not?

        They have the power, right?

        And yes, Donnieboy, you pretty much hit it. The app market will allow them to make large amounts of money from your TV, Movie, and so forth.
        Michael Alan Goff
      • I disagree


        If there was any doubt left after the complete failure of the Pioneer Elite series tv and boutique television stores then 3D should have finished that doubt off. There is no vast and untapped pool of wealthy suckers willing to grossly overpay for a "feature" tv. Especially when you can buy a cheapo at Costco and at worst slap a $99 Apple TV on it and accomplish the same thing.

        On a side, but related note, I noticed my local Apple store has, fir the first time since it opened, removed its Apple TV display setup. That the surest sign I know of a product that isn't selling.
      • oncall, I would have to say that it would be a really big seller

        much bigger then GoogleTV (though that's not saying much, considering how GTV failed out of the gate) only because of the perception that it's more then what was before (AppleTV)

        The selling point would be that even if you don't use iTunes to download shows and movies, it will still function as "the best flat pannel television ever designed, as only Apple can engineer it",
        Plus they're show someone struggling with a Ruko and about "40 wires needed to hook it up". ;)
        John Zern
      • Well all this is cloud talk anyway

        @John Zern

        But another consideration is consumer expectation. A tv is an appliance, people buy one and can reasonably expect 10-20 years life out of them, longer than iTunes has existed. That's a LONG time that Apple would have to support these devices. Very different from the expectation placed upon a gadget like the Apple TV, i.e. people buy it because it's relatively cheap but never expected it to last long so they toss it and buy something better as soon as something better comes along.

        And where are they going to sell these monsters? Clear out a couple racks of small, hot selling items in Apples usually quite compact stores? So they can sell one TV with the commercial space that used to sell dozens of iPads. Or maybe stack one on the rack at Best Buy with oh about 20 models next to it, all far cheaper and far richer in features? How about repairs? People are not going to belly up to the genius bar with a 50" TV tucked in their backpack and they are not going to walk out with a fresh one like they can with an iPod that's gone bad. Were talking in-home repairs, a service that Apple is not geared up to provide so that means contracting out with further margin erosion.

        Sorry, I get a kick out of Munster and his prediction but this one has pure fantasy written all over it.
    • They don't need high margins on the TVs themselves

      @oncall They can make a killing by providing the infrastructure for the online delivery. The iTunes brand can be a huge attraction and Apple can make a comission on every on-demand purchase and live pay-per-views.

      They don't need a high margin profit on the hardware to actually make a high margin profit.
      • They can do all that without making the TV


        An Apple television has no real upside for the consumer or Apple that cannot be delivered as a software app to current TV makers or as an add-on device, i.e. the Apple TV device. As a consumer I can plug my 7 year old plasma TV into any of the devices currently offered by Apple, Sony, Logitech, LG etc. and instantly gain 100% of the benefits of their individual offerings while NOT having to buy a new TV or locking myself into a single vendors goods. A small device can be easily fixed/replaced at the Apple store and software can be easily patched by remote. A device is merely an "accessory" to what a lot of people consider their TV to be, a piece of furniture or appliance that probably has half the room designed around it. Devices are easily discarded and replaced "this one didn't work out, oh well, bring it back."

        They do need a high profit margin. The assumption by Apple must be that many of the people who buy an Apple television will not buy anything from iTunes and secondly and most importantly Apple will need to support such devices for FAR longer then they are accustomed to. Unlike the Apple TV 1 that Apple said "that's it, we're moving on" after 3 years, most modern LCD TV's have a lifespan on the bulbs of 100,000 hours. Viewing 12 hours a day that's potentially 22 years! Regular TV makers pull it off because they are essentially dumb monitors for the most part. You don't need to change out the TV because Apple has moved on or the format has changed over 20 years, you keep the TV and change out the devices. Apple will be able to move on because they won't be tied to supporting TV's they sold 20+ years ago.

        P.S. And you think Microsoft has a headache getting people to "move on" from XP, a mere decade old, wait till Apple is stuck having to service people TV's 20 years down the road.
    • RE: Does a $3.9 billion supply-chain investment mean we'll finally get an Apple HDTV?

      @oncall I think the main reason Apple TV isn?t doing very well is because it requires an HDTV to use. If I could hook one up to each TV in my house, I?d buy three of them and cancel my DirecTV service. Who needs a $70/month television bill?
  • The thing to notice here is that Apple will get the components cheaper than

    just about anybody else by investing BILLIONS in guaranteeing production and locking in prices. They will further no doubt use a completely integrated system-on-chip based on the A4 to make adding a CPU to a TV cost less and perform better than what anybody else can do. And, of course integrating it all and putting the Apple brand on it, will mean higher margins that ANY other manufacturer.

    Of course this means the other manufacturers will jump on the Google bandwagon, but, be relegated to lower margins.
    • That gamble hasn't always worked for Apple

      They've made previous bets in RAM that didn't work out for them.

      Apple's big plus is their interface / hardware design skills, sadly lacking in most digital TV companies (and Apple's software competitors).

      As with the iPhone this market is huge, you only have to capture a small percent to generate significant revenue. I'd like to see Apple give it a go, I'm on my 7+ STB and all of them have been a frustrating experience.
      Richard Flude
  • I already use my 27" iMac as a TV.

    After all for many a year 27" was a traditional TV screen size and the form factor of the iMac is well a perfect TV form nowadays. So "IF" the iMac gets yet a larger screen why not simply add a tuner... How much can that be?

    Pagan jim
    James Quinn